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extractive industry news in Nigeria and around the worldFri, 05 Jun 2020 12:16:52 +0000en-US
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1 https://wordpress.org/?v=5.3.3146877928NNPC Mulls Expansion Into Medical, Housing To Sustain Revenue Generationhttps://extractive360.com/2020/06/05/nnpc-mulls-expansion-into-medical-housing-to-sustain-revenue-generation/
https://extractive360.com/2020/06/05/nnpc-mulls-expansion-into-medical-housing-to-sustain-revenue-generation/#respondFri, 05 Jun 2020 12:16:52 +0000https://extractive360.com/?p=5511As part of measures to cope with the boom and bust cycle in the global crude oil market and to sustain revenue generation for the Country, the Nigerian National Petroleum Corporation (NNPC) is firming up a bouquet of business portfolios in the power, medical, housing and other sectors that would strengthen the profitability of the National Oil Company.

A press release Thursday in Abuja by the NNPC Group General Manager, Group Public Affairs Division, Dr. Kennie Obateru, quoted the corporation’s Chief Operating Officer, Ventures and Business Development, Mr. Roland Ewubare, as saying that the Ajaokuta-Kaduna-Kano (AKK) pipeline network would enable the NNPC to deepen its footprint in the power sector through the establishment of an Independent Power Plant.

The NNPC Chief Business developer made this submission at an appearance on Arise Tv Global business report programme.

Ewubare stated that NNPC would use its network of excellent medical centres across the country to provide innovative healthcare for Nigerians.

“NNPC is creating an energy company that would have portfolios in renewable energy; we have initiatives on solar that is ongoing. We have got biofuels agreements with some state governments that would soon be activated. We do have a lot of non-core businesses that are aggregated under the Ventures and Business Development Autonomous Business Unit of the NNPC that would be expanded through effective collaboration and partnership with the private sectors,” Ewubare informed.

He disclosed that the NNPC had a lot of hectares of land across the country and would soon be partnering with private developers to reduce the housing deficit in the country for the benefit of Nigerians who are the core shareholders of the corporation.

Ewubare explained that NNPC’s aspiration was to achieve a $10 per barrel cost by the fourth quarter of 2021, adding that a lot of logistics costs would be recalibrated to drive down the cost of crude oil production in the country.

“When you have a low commodity price regime, as the case now, the only way we are able to squeeze out some reasonable cash and financial gain to the nation is by curtailing and constraining our costs in line with the GMD’s aspiration to push for a $10 per barrel cost of production. Against this backdrop, the conversation around cost becomes an imperative and urgent one”, Ebuware stated.

The NNPC Chief Business Developer said the corporation was working closely with its partners to commercialize flared gas by converting it to Compressed Natural Gas (CNG) and Liquefied Natural Gas, adding that the gesture would preserve the flora and fauna of the country.

]]>https://extractive360.com/2020/06/05/nnpc-mulls-expansion-into-medical-housing-to-sustain-revenue-generation/feed/05511OPEC+ Cuts Responsible For Current Oil Market Stability — Barkindohttps://extractive360.com/2020/06/04/opec-cuts-responsible-for-current-oil-market-stability-barkindo/
https://extractive360.com/2020/06/04/opec-cuts-responsible-for-current-oil-market-stability-barkindo/#respondThu, 04 Jun 2020 15:50:47 +0000https://extractive360.com/?p=5509The Secretary-General of the Organisation of Petroleum Exporting Countries (OPEC), Dr Mohammad Barkindo has attributed the stability in the global crude oil market and the recent rebound in the price of crude oil to the OPEC+led response to the volatility in the market.

Barkindo disclosed in his presentation, via videoconferencing, to the 133rd Meeting of the Economic Commission Board.

He said that the industry was not out of the woods yet, stating that the pace of the global economic rebound – particularly given the very uncertain economic paths of the world’s two largest economies, the US and China .

According to him, the recovery in global trade, will be central to the revival of the oil market.

“I am confident that this Organisation will emerge from the current challenging and unprecedented times more united, stronger and more forward-looking. We are not out of the woods yet.

“But the historic OPEC+-led response to the current crisis is already helping to reduce volatility, stabilize the oil market, and to provide a platform for recovery and growth in the coming months and years,” he said

Barkindo emphasised the need for timely and accurate data to help its various committees.

He stated that strategic decisions to further stabilise the crude oil market could only be reached when underpinned by up-to-date and in-depth analysis.

“It is clear that the post-pandemic world will be much different and require thorough and forward-looking reflections.

” It will take time for a new equilibrium to emerge, not only in terms of a balanced market, but among producing countries as well.

“No individual stakeholder can have all the answers. It is only by reaching out and deepening the dialogue between reputable institutions that we can provide a better and broader sense of the rapidly evolving energy landscape.

“We continue to work closely with the International Energy Agency – including regular consultations – and International Energy Forum to ensure open lines of communication between producers and consumers.

” Together, we collaborate to ensure access to accurate, timely and transparent data about the markets, ” he said.

He noted that the challenges created by the COVID-19 tragedy wwould require special attention to ensure that the OPEC Conference had access to quality and timely data, market information, and fact-based assessments on current and projected conditions.

He further said that it was essential that the Joint Ministerial Monitoring Committee of the Declaration of Cooperation (DoC) was equipped with the latest and best information so it can make apt and timely recommendations under rapidly changing circumstances.

“Indeed, the link between transparent data and better predictability, and a secure and sustainable energy supply, will grow in importance in the months and years to come,” he said

Barkindo also stated that OPEC was constantly working hard to improve its research and deepen its analysis to provide the best possible input to its various boards which are major sources of key decisions reached by its ministerial conference.

He, however, noted that the rebalancing process may be longer than anticipated under the prevailing uncertainties and downside risks, especially given that global inventories appear to be continuing to build, albeit at a much lower rate than the record pace of late March and April.(NAN)

Mr Sarki Auwalu, Director, DPR, gave the numbers on Wednesday during an online interactive session with the media on topical issues in the oil and gas industry in Nigeria.

Auwalu said the new figures represented a marginal increase of 1.16tcf in proven natural gas reserves representing 0.57 percentage increase from previous 202tcf recorded on Jan. 1, 2019.

According to him, the DPR has set new targets of 210tcf by 2025 and 220tcf by 2030.

He said that crude oil reserves declined by 82million barrels representing 0.22 percentage decrease when compared to the 36.97 billion barrels recorded during the same period in 2019.

The director also explained the rationale behind the ongoing bid rounds for 57 marginal oil fields being conducted by the regulatory agency on behalf of the Federal Government.

Auwalu said :”These are fields that have been unutilised and we believe that this was overdue because the last time Nigeria did bid round for the marginal fields was in 2003.

“Between that time and now, a lot of professionals have come into the industry and some companies who were among the 24 successful companies are now considered oil producing companies.

” So, there is a lot of appetite to invest in Nigeria and the government also needs revenue because the benchmark for the 2020 budget has been revised to $27 per barrel.”

He said since the bidding was only for indigenous companies, it would help in boosting the Nigerian economy and also create jobs for the people.

Auwalu also clarified that the marginal fields embroiled in litigation were not part of those in the fresh bid round, adding that it however included some of the previous 24 that were not utilised by successful bidders.

He said: “The bidders were given awards and not licences, and they were to develop the fields within 10 years.

” Some of these companies failed to achieve the conditions for the awards. In 2013, they were granted an extension to 2015. Thereafter, another extension was granted to them till 2018 and they could not bring the field to production.

“Technically, the government is losing, so that is why they were brought back for bidding and it is an opportunity for the previous bidders to bid again and have another 10 years to develop them again.”

Auwalu maintained that the bidding process which was being done electronically would be transparent, stressing that only competent companies would emerge as winners.

He also disclosed that over 200 companies had expressed interest in Nigeria’s 96 gas flare points for various commercial purposes, which would increase government’s revenue while addressing environmental challenges. (NAN)

The agency disclosed this in a letter to marketers with reference number A.4/9/017/C.2/V/701 titled “Guiding Price for Premium Motor Spirit (PMS) in the Month of June 2020,” released on Monday in Abuja.

The News Agency of Nigeria (NAN) reports that the new price is N2 less than the pump of N123.50 per litre it announced for May.

“After a review of the prevailing market fundamentals in the month of May and considering marketers’ realistic operating costs, as much as practicable, we wish to advise of a new PMS guiding pump price with corresponding Ex-Depot price for the month of June, 2020.

“All marketers are advised to operate within the indicative prices as advised by the PPPRA,’’ it said.

According to the agency, the new price band for PMS is now N121.50 per litre and N123.50 per litre, meaning that no marketer is allowed to sell above the highest price range of N123.50.

It also fixed the ex-depot price of the commodity at between N102.13 and N104.13 per litre, and ex-depot price for collection at between N109.78 and N111.78 per litre.

Ex-depot price of commodity is the price the product is sold to depot owners while the ex-depot collection price is the price the product is sold to retail outlet owners. (NAN)

]]>https://extractive360.com/2020/06/01/pppra-reduces-fuel-price-to-n121-50-per-litre/feed/05505Oil Prices Edge Down As Wary Traders Eye Upcoming OPEC+ Meetinghttps://extractive360.com/2020/06/01/oil-prices-edge-down-as-wary-traders-eye-upcoming-opec-meeting/
https://extractive360.com/2020/06/01/oil-prices-edge-down-as-wary-traders-eye-upcoming-opec-meeting/#respondMon, 01 Jun 2020 12:05:37 +0000https://extractive360.com/?p=5503Oil prices edged down on Monday as traders took profits, with the Organisation of the Petroleum Exporting Countries (OPEC) considering meeting as soon as this week to discuss whether to extend record production cuts beyond end-June.

Brent crude LCOc1 fell 15 cents, or 0.4 per cent, to $37.69 a barrel, in the first day of trading in the contract with August as the front month.

West Texas Intermediate (WTI) crude futures CLc1 for July delivery were at $35.36 a barrel, down 13 cents, or 0.4 per cent, by 0419 GMT.

The price falls come after front-month Brent and WTI prices posted their strongest monthly gains in years in May.

Gains were boosted by OPEC crude production dropping to its lowest in two decades, with demand expected to recover as more nations emerge from coronavirus lockdowns.

“The focus is very much on OPEC+,’’ OCBC economist, Howie Lee, said, referring to OPEC and its allies including Russia.

OPEC+ agreed in April to reduce output by an unprecedented 9.7 million barrels per day (bpd) in May and June after the coronavirus pandemic ravaged demand.

“We might see a cautious pullback in (crude) prices given that downstream prices haven’t caught up … but if OPEC+ does come up with a three-month extension, there’s a possibility that prices may hit the $40 level,’’ Lee said.

Still, tensions between the United States and China weighed on global financial markets, while traders are also keeping an eye on riots over the weekend that have engulfed major U.S. cities.

Saudi Arabia is proposing to extend record cuts from May and June until the end of the year, but has yet to win support from Russia, sources have told Reuters.

Algeria, which currently holds the OPEC presidency, has proposed that an OPEC+ meeting planned for June 9-10 be brought forward to facilitate oil sales for countries such as Saudi Arabia, Iraq and Kuwait.

Russia has no objection to the meeting being brought forward to June 4.

“It’s been widely interpreted as likely to lead to an extension of the current production cuts,’’ CMC Markets’ Chief Market Strategist, Michael McCarthy, said.

“Oil prices have come down slightly in our session but they’re still at elevated levels.

“I suspect that’s the key driver of prices on Friday night and should keep prices reasonably well supported today.’’

Meanwhile supply in North America is also falling as data from Baker Hughes Co showed that the U.S. and Canada oil and gas rigs count dropped to a record low in the week to May 29.

(Reuters/NAN)

]]>https://extractive360.com/2020/06/01/oil-prices-edge-down-as-wary-traders-eye-upcoming-opec-meeting/feed/05503FG Reconstitutes NNPC Board, As Former GMD Baru, Pass Onhttps://extractive360.com/2020/05/30/fg-reconstitutes-nnpc-board-as-former-gmd-baru-pass-on/
https://extractive360.com/2020/05/30/fg-reconstitutes-nnpc-board-as-former-gmd-baru-pass-on/#respondSat, 30 May 2020 11:39:17 +0000https://extractive360.com/?p=5500President Muhammadu Buhari has approved the reconstitution of the Board of the Nigerian National Petroleum Corporation (NNPC), after the expiration of the term of the board members appointed in 2016.

Dr Maikanti Baru

This comes as the immediate past Group Managing Director of the Corporation, Dr Maikanti Baru dies, aged 60, after a brief illness.

Members appointed into the new board are Mohammed Lawal (North West), Tajudeen Umar (North East), Adamu Mahmood Attah (North Central), according to a statement by the Special Adviser to the President (Media and Publicity) Femi Adesina.

Others include Senator Magnus Abe (South South), Dr Stephen Dike (South East), and Chief Pius Akinyelure (South West). The new board will be in place for three years.

Meanwhile, the NNPC which announced Dr Baru’s demise with regrets Friday night, said he was a consummate Mechanical Engineer, and the 18th GMD of the Corporation.

Expressing shock over the sudden death of Dr Baru, GMD Mele Kyari described him as a man ‘of exemplary character and disposition.’

Baru the 18th GMD of NNPC was at the helm of the Corporation from July 4th 2016 to July 7th 2019. He died Friday night in an Abuja hospital after a brief illness.

]]>https://extractive360.com/2020/05/30/fg-reconstitutes-nnpc-board-as-former-gmd-baru-pass-on/feed/05500CSOs Calls For Sweeping Reforms In Nigeria’s Extractive Industryhttps://extractive360.com/2020/05/26/csos-calls-for-sweeping-reforms-in-nigerias-extractive-industry/
https://extractive360.com/2020/05/26/csos-calls-for-sweeping-reforms-in-nigerias-extractive-industry/#respondTue, 26 May 2020 21:05:06 +0000https://extractive360.com/?p=5497Following the effect of the Covid-19 pandemic on the global economy and that of Nigeria in particular, a coalition of Civil Society Organisations (CSOs) has called on the Nigerian Government to urgently implement needed reforms in the country’s oil and gas sector.

In a communique jointly signed by 13 different organisations working to promote transparency and accountability in the sector, the groups observed that the immense fiscal pressure Nigeria is under as a result of low crude oil prices can only be reduced through the urgent implementation of critical reforms.

Recall that in response to the economic downturn Nigeria has implemented a few policy measures including the review of the Federal Government 2020 budget Benchmarks and cut of the overall approved appropriation Act by N1.5 trillion, in addition to announcement of fuel subsidy removal.

However, the organisations which include Nigeria Natural Resource Charter (NNRC), Budgit, Media Initiative for Transparency in Extractive Industries (MITEI), considered these measures to be inadequate, urging the federal government to take the opportunity to enforce a holistic industry reform.

To this end they recommend the privatization of the country’s four refineries in their present condition to avoid further revenue losses. “We suggest the adoption of a transparent merit-based model for privatization… We encourage the government to adopt favourable fiscal terms that bring about a renewed investors’ confidence and also help fast track the proposed 29+ refineries, which still have valid operating licenses,” the group said.

To clear the present confusion relating to fuel subsidy removal, the group also urged the government to lay out defined processes and regulatory guidelines to support the announced removal of fuel subsidy.

“These should be pushed forward and announced by the Presidency and the Minister of Petroleum Resources to give the policy an official seal of affirmation to all Nigerians that we are not in another false expedition,” the communique made available to e360 said.

Recall that the Group Managing Director of the NNPC, Mr. Mele Kyari, had on April 8, 2020 announced an end to fuel subsidy regime. But there has been no clear policy guideline in this direction since the announcement.

Consequently, to commit to the sustainability of the no-subsidy regime, the group emphasised the need to give the GMD’s policy statement legal backing either through a stand-alone legislation, or through appropriate clauses integrated into the Petroleum Industry Bill (PIB).

According to the group, there is also the need for government to transition the Petroleum Products Pricing and Regulatory Agency (PPPRA) and the Petroleum Equalisation Fund (PEF) into new roles to ensure the sustainability of the proposed ‘non-subsidy policy’. “Repeal of the PPPRA and PEF(M)B Act and transition them into efficient and competent institutions to support the reforms encapsulated in the proposed PIB are possible options to consider,” they stated.

Furthermore, to guide against exploitation of Nigerians when the downstream sector is liberalised, the CSOs urged government to prepare for a post-price regulation era by prioritizing consumer protection. “The interests of the people should not suffer exploitation in the hands of profiteering marketers. We suggest anti-trust or competition propositions using the Federal Competition and Consumer Protection Act 2019,” the group said.

With regards to the role of the National Oil Company, the CSOs advised against giving the NNPC any advantage, whether comparative or competitive, over other petroleum products marketers in terms of access to foreign exchange for products importation, to create a level playing field.

“If the NNPC must remain a player in the market, it must strive to operate under the same conditions and rules as other players in the sector regulated only by the prevailing market forces and competition,” the communique stated, adding that while the industry awaits passage of the PIB, steps should be taken to delineate the roles of policy formulation, regulation and enforcement as well as operation in the Nigerian oil and gas industry.

Other organisations which signed the communique include Civil Society Legislative Advocacy Centre (CISLAC), Women in Extractives, Connected Development (CODE) and Spaces for Change, amongst others.

In May 2019, Total agreed to an $8.8 billion purchase of assets in Algeria, Ghana, Mozambique, and South Africa that Occidental acquired in its acquisition of Anadarko Petroleum Corp. Total and Occidental have completed sales of the Mozambique and South Africa assets.

The purchase and sale agreement provided that the sale of the Ghana assets was conditional upon the completion of the Algeria assets’ sale. Occidental has informed Total that, as part of an understanding with the Algerian authorities on the transfer of Anadarko’s interests to Occidental, Occidental would not be in a position to sell its interests in Algeria to Total.

In Ghana, the deal would have seen Total acquire 27percent participating interest in Jubilee field and 19percent participating interest in the TEN fields. These fields represented a gross production of 143,000 b/d in 2018.

Because the purchase and sale agreement expires in September, Total and Occidental have executed a waiver of the obligation to purchase and sell the Ghana assets, so that Occidental can begin marketing the sale of the Ghana assets to other third parties.

Source: OGJ

]]>https://extractive360.com/2020/05/26/total-cancels-deal-to-acquire-ghana-assets/feed/05495Deregulation: Repeal Minister’s Power To Fix Prices, FG Urgedhttps://extractive360.com/2020/05/17/deregulation-repeal-ministers-power-to-fix-prices-fg-urged/
https://extractive360.com/2020/05/17/deregulation-repeal-ministers-power-to-fix-prices-fg-urged/#respondSun, 17 May 2020 21:19:32 +0000https://extractive360.com/?p=5490For the downstream oil and gas sector to be completely deregulated, the federal government must take steps to repeal provisions in the petroleum Act which empowers the Minister of Petroleum Resources to fix prices of petroleum products, industry expert has said.

In his presentation during an online workshop on the ‘Urgent Case for Reforms in the Petroleum Industry’ Mr. Isreal Aye, said S.6 (1) of the Petroleum Act which states that “The Minister may by order published in the Federal Gazzette fix the prices at which petroleum products or any particular class or classes thereof may be sold in Nigeria or in any particular part or parts thereof,” must be repealed to ensure proper deregulation of the downstream sector.

“It is worthy of note that this law is at variance With the Federal Executive Council (FEC) approved oil and gas policies which prescribes that petroleum subsidy be discontinued within 1 year of the Nigerian Oil and Gas Policies coming into effect…,” Aye said.

“The law precedes the Policies both in time and hierarchy. So the Law prevails until it is changed,” Aye added while speaking at the workshop hosted by the Media Initiative on Transparency in Extractive Industries (MITEI), and facilitated by the Facility for Oil Sector Transformation (FOSTER II).

“In order to deregulate the downstream sector, we need to amend or expunge S.6(1) as it is currently written,” Aye said, and replace with the price modulation mechanism.

He further explained that a framework which prescribes the role and responsibilities of each institution taking decisions at every point in the product pricing process will be needed. “We need a framework that show how the pricing template was arrived at, the intervals of the price modulation adjustments, whether monthly, quarterly, weekly or daily,” Aye said.

He emphasised the need for an agency legally empowered to handle the responsibility of modulation of petroleum products prices in the country outside the Nigerian National Petroleum Corporation (NNPC). He said the NNPC should concentrate on handling its commercial operations to avoid overlapping roles.

“We must demand for an open and transparent process to handle all the issues in the price modulation value chain to remove arbitrariness and exploitation,” Aye stated.

According to him, subsidy which was intended to ameliorate the poor and vulnerable Nigerians hasn’t been meeting its objective, hence the need for government to holistically rethink the scheme.

Instead of a subsidy regime which does not directly benefit the poor, Aye recommended that government can instead create other measures such as electricity tokens, bus vouchers, cash transfer or tax rebate to citizens directly after removing subsidy.

While noting that spending about N1trillion annually subsidising fuel, which mostly benefit the rich, makes no economic or social sense, the expert said monies saved from subsidy removal, can instead be used to fund critical infrastructure development, social programmes and capacity building for citizens.

]]>https://extractive360.com/2020/05/17/deregulation-repeal-ministers-power-to-fix-prices-fg-urged/feed/05490Marginal Fields: Group Demands Inclusion Of Beneficial Ownership In Bid Guidelineshttps://extractive360.com/2020/05/17/marginal-fields-group-demands-inclusion-of-beneficial-ownership-in-bid-guidelines/
https://extractive360.com/2020/05/17/marginal-fields-group-demands-inclusion-of-beneficial-ownership-in-bid-guidelines/#respondSun, 17 May 2020 18:38:10 +0000https://extractive360.com/?p=5487Ahead of Nigeria’s planned Marginal oil fields bid round, a group of Civil Society Organisations (CSOs) and the media, have asked the federal government to make Beneficial Ownership (BO) disclosure a compulsory part of the bid guidelines.

The call was made on Wednesday during an online workshop on the ‘Urgent Case for Reforms in the Petroleum Industry’ hosted by the Media Initiative on Transparency in Extractive Industries (MITEI), and facilitated by the Facility for Oil Sector Transformation (FOSTER II).

The group noted that there could be no transparency without openness hence the need to promote BO in the planned marginal fields bid round, and indeed all subsequent oil bid rounds in Nigeria.

As there had been instances in Nigeria where serious bidders shunned offers, describing it as a show by government to reward its friends and associates, the groups said inclusion of BO requirements this time around would greatly promote transparency in the process and encourage serious bidders to participate, thereby resulting in higher revenues for government.

According to reports, of the 175 marginal oil field licenses issued by the Nigerian government between 2000 and 2007, only one has been developed into commercial production. This is as a result of the offers being awarded to firms with questionable capacity, as serious bidders refused to participate in the exercise due to transparency concerns.

E360 gathered that previous bid rounds in Nigeria revealed a sharp decline in interest from serious investors (local and foreign) in the country’s marginal oil fields. In 2005, only 57 percent of the oil blocks offered for auction secured at least one bid, the number dropped to 40 percent by 2007.

With Nigeria’s daily oil production declining from about 2.3 million barrels per day (bpd) in 2014 to 1.6m bpd in 2019, and further worsened by the current impact of the Covid-19 on the global oil market, the sector faces a bleak future unless reforms are urgently implemented, key of which is to promote BO disclosure in oil bid rounds.

BO is a principle by the global Extractive Industries Transparency Initiative (EITI) for its member-countries to ensure information about beneficial owners of assets in the extractive industries are disclosed to the public. The initiative is also being promoted by the Open Government Partnership which Nigeria is a signatory to. Nigeria officially unveiled its BO register for the extractive sector in December 2019.

In his presentation at the workshop, Energy expert, Mr Israel Aye, said Nigerians must demand that BO disclosure be included as an intrinsic requirement in the guidelines to be put out for bidders by the Department of Petroleum Resources (DPR). This he said, is the only way to guarantee that only serious investors with capacity and genuine plan to develop the oil fields will be attracted to participate.

Awarding the assets to investors without clear capacity to develop and exploit fields would leave the country with same scenario as is the case with fields awarded between 2000 and 2007 which has neither profited the people or the government, the group warned.

Mr Aye further emphasised the need to expunge the absolute powers to award and revoke oil licenses granted the Minister of Petroleum Resources in the petroleum Act. He blamed the provisions for the scarcity of serious investors in Nigeria’s oil licencing round.